Is Exporting for You? An Overview
By Brian Gauler
The world can be your oyster if you invest the appropriate time, planning and creativity in developing your opportunities.
Every day, numerous details in our lives remind us that we live in a truly global business world. The TV that supplies the morning news, the car you drive to work, the computer in the office all very likely would have been manufactured overseas. Each serves as an indicator of how the international marketplace affects our daily living.
These types of consumer items, which we tend to take for granted, should also serve to remind us that products we manufacture and sell domestically also can satisfy needs overseas! Countries world-wide represent markets for our product and services. Think of the number of countries that exist to get an idea of the great sales potential.
Reasons for Exporting
Why should you consider entering foreign markets? There are some excellent reasons for you to add international prospects to your marketing effort, even if you aren't fully serving your domestic market after establishing some base of national sales:
- Increased sales. Many companies establish export sales in a reasonable time, and then can gradually see a significant portion of their revenue coming from these opportunities.
- Seasonality. It makes a lot of sense to consider markets that have seasons opposite to North America's, particularly for seasonal products (e.g. swimwear).
- Company Image. Establishing yourself as an international company tells your customers (and your staff) that you understand in today's market the need to be truly global.
There are numerous other reasons why companies find it beneficial to enter the foreign marketplace, and you may find some specific to your situation.
Developing Export Readiness
How do you become export ready? That's a good question, but there is no definite answer. Although state and federal export assistance agencies may have a questionnaire and form to help determine your export readiness status, there is no clear-cut definition of "export ready." Derived from common sense and the accumulated knowledge of export assistance service providers, following are some guidelines for helping you get prepared for the international marketplace:
Develop an international marketing plan. Just as you determined how to serve your markets here, you must determine how you will go about serving global markets. Most marketing plans have common elements that include conducting a current marketing situation assessment, identifying key problems and opportunities, establishing quantifiable goals, recognizing any key issues and developing strategies with supporting action plans. You should also include in your planning a budget to support your efforts, and possible alternatives if things don't work out the way you plan.
Prepare communication strategies. You will need to consider how you are going to present your company and product information to interested parties overseas, and, in turn, how you can obtain information from them.
Get proactive. Once you have made your commitment, assessed your ability to serve global markets, developed an international marketing plan and created your communication tools, you are basically ready (export ready) to make things happen. Now you can utilize the numerous export assistance programs and services available to you from state and federal agencies.
- Evaluate your readiness. You probably need to start with a company assessment to determine your strength and weaknesses for entering global markets. Crucial to any success is management commitment, and if you cannot determine that sufficient commitment is there, you need not go any further.
- Research your market. Initially, you can probably serve up to a dozen or so foreign markets with existing staff. Europe, the Pacific Rim countries, Latin America and a few other select areas easily represent over 30 potential markets for most products.
- Determine market entry strategies. There are numerous strategies available for you to consider, but three are generally basic to most successful exporting companies:
- Stocking distributors. The majority of export sales are done through distributors, who generally are responsible for all aspects of marketing and distributing your products in their country.
- Piggyback. Often prospective exporters can locate another U.S. manufacturer of a comparable (but non-competing) product that has established international distribution and sales. That company may be interested in helping you build relationships with their appointed distributors to help them grow.
- Export management companies. These private firms serve as the "export department" for several producers of goods or services, either by taking title or by soliciting and transacting export business on behalf of clients in return for a commission, salary or retainer plus commission.